Only the lonely

According to Lanice Steward, MD of Anne Porter Knight Frank, there are few more contentious subjects in the estate agency sector than the issue of sole or dual mandates. Those supporting them will go to any lengths to expound their benefits while those against them continues claim they are a monopolistic con trick.

“In my view,” said Steward, “there can only be one reason for objecting to a sole mandate and that is the client, rightly or wrongly, fears that his agent is inept or will not work hard enough for him.

“A sole or dual agency places great responsibility on the agent and it is understandable that clients fear that the agent allocated to them might not be one of the best available.”

True reason for failure

Steward warned, however, that once the client has accepted a sole or dual mandate an agent will often be blamed for non-performance when the true reason for failure is that the client has insisted on a price that is too high for the property.

“At the end of the sole mandate period, another agency takes over and persuades the client to sell the home at a market related price.

“This scenario has been seen quite frequently in the last year,” said Steward.

In choosing an agent, said Steward, the client should be careful to avoid three pitfalls.

“The first is to appoint an agent simply because you like him or her and feel you can have a happy relationship. An examination of their track records should always be a prerequisite.

“The second mistake is to appoint an agent solely because he or she is well established in their territory. On occasions, the energetic, enthusiastic newcomer will be more motivated, harder working and ultimately more successful than the pleased-with-himself older hand.”

The third mistake, said Steward, is to sign a sole mandate but to deprive the agent of his ‘tools’.

“There are clients who expect their agent to sell without the backup of advertising, show days, the internet, signboards or drops. They want the sale to be ‘private’, but that is like asking a surgeon to amputate a leg without most of his equipment. It places a huge and unreasonable burden on the agent.”

One good agent will achieve almost complete exposure

The most common reason for appointing four, five or more agents, said Steward, is that the client feels he will get greater exposure to buyers. This, she said, is a fallacy. A good agent using the tools referred to above will achieve almost complete exposure to the existing buyers and, in a reputable agency, have access to a long list of possible investor buyers.

“The real problem with going the multi-agency route,” said Steward, “is that it will result in the agents competing not with the buyer, but with each other. Desperate to achieve the sale ahead of their rivals, they will let buyers place lower and lower bids and will work on the client to accept one of these. A sole agent, however, will accept his responsibilities to his client and, as he has as much as three months in which to work, he will not feel pressurised but will strive to keep the price market related.”

Ideally, said Steward, the seller using a sole or dual mandate will end up with two buyers competing for the same property. Buyer number one will be told that he has a rival (whose offer and terms will not be disclosed) and will be invited to review his price. If he does not accept this invitation, buyer number two will be given the same option — again without being told the value of the other offer — and so the process will continue until both buyers have made their final offer.

Sometimes, said Steward, it is not the price but conditions of the sale that will make all the difference — a large deposit or an early transfer date may well suit the seller better than a higher price paid several months later.

“When the chips are down,” concluded Steward, “almost all the arguments point to sole or dual agencies being the route to go — provided you have a keen and competent agent.”

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